BANKER GIVES A WARNING.

Press, Volume LXVI, Issue 20086, 15 November 1930, Page 12

BANKER GIVES A WARNING.

DANGERS OF INFLATION. IGNORANCE OF^CONSEQUENCES. The dangers of inflation of the note issue, and the nationalisation of banks, and the necessity for tho confidence of the outside financial world in Australia's ability to make good, were pointed but by Mr Harold W. Lloyd (chairman • of directors) and Sir Frank Moulden, at the half-yearly meeting held in Adelaide of shareholders of the Bank of Adelaide. Mr Lloyd said it was felt that those difficulties were not insurmountable, provided that economic laws were not further flouted by the Federal Government, and the confidence of the public was not undermined by extremist legislation tending toward inflation or repudiation. It was obvious, and becoming more generally realised, he said, that to restore confidence among those nations overseas, who were watching her struggles with interest, and who were in a position to help her, that Australia's standard of living, expenditure, and use of must be readjusted to nearer pre-war levels, and to those of the rest of the world, and much' of the experimental legislation, of which her Governments appeared so fond, must bo abandoned. It was unfortunate that Australia could, not avail herself of the ' opportunity of obtaining cheap money to repay her maturing loans. Lack of confidence was the' main factor influencing would-bG investors at present. Mr Lloyd said he wished to see both Governments and individuals balance their budgets, cost of production decrease, and production increase, so that on a restoration of confidence in Australia's ability to fulfil her obligations, lenders would make funds available for reproductive works, and for the development of industry. Then interest rates would adjust themselves to the supply and demand for money in a normal manner. There had been some suggestions by extremists, that interest rates should be compulsorily reduced. Just what they wished was not clear. It must, however, bo obvious that tho present high rates were mainly due to the policy of Governments in raising internal loans at interest rates competitive with the return of other investments. Those internal loans had diverted from ordinary channels enormous sums, which would otherwise have been available through the banks for use in trade and industry. Cumulatively heavy and retrospective taxation aggravated by bureaucratic administration was making it impossible for business men to budget ahead. Pplltical uncertainty and Communistic utterances advocating repudiation, and the artificial reduction of interest, were making the British investor shy of any new Australian loans, and were depreciating stocks already on the market. Ha* earnestly hoped that the efforts of the Commonwealth and several State Governments would concentrate on the restoration of confidence in Australia, and On the rehabilitation of Australia's credit ;in the world's money market. Sir Frank Moulden said certain ex--tremists, supported by a large number of people who were ignorant of the consequences, seemed to be doing all they could to bring ruin to this wonderful country. He wondered whether the people of Australia realised what dangers lay in the wild talk of inflation oJ?' the note issued and the nationalisation of their banks.' ' During the,present trouble the One bright feature 1 had been the confidence of the people in the present banking system, and it was essential that that confidence should be retained. If that confidence were to be destroyed it would be an evil day for them all. Past experience had deprived them of any confidence ifi political or Governmental control, though politicians seamed bent on disregarding the experience of older countries, who had tasted the bitter results O# note inflation, and such false remedied. He hardly thought that the million people who owned the deposits in the savings and other banks would stand quietly by and watch their life savings vanish into thin air. "I do not wish td be an alarmist, but I think people should take heed before the damage is done, and support that saner section Jofotyr public men, who.are>en-' deavourln'g to meet facts on economic Hues," he added.

TRADE WITH THE EAST value of personal contact. - fIHB PBESS speel*! B«r»ieo.J AUCKLAND, November 14. ' After an extensive totir through the North Island, Mr j. Watanabe, a .Japanese shipping representative, left for Sydney by the Uiimaroa. In an interview Mr Watanabe said the purpose of . his tour was to Supervise, the inauguration of the Japanese' shipping service to New Zealand, exporters appeared tcs realise . that "if , the products" of the prlni'ary industrtes weire to be absorbed hew? tei'i'itory had tb be opetfed up to keep pace with the steadily increasing output and, like the Americans, it was to ihd Far East that their thoughts rightly centred China and Japan provided s.potential market for textiles, and New Zealand was capable of supplying materials- of exceptional worth whichwore at present '/unknown in the East. . Mr Watanabe cmphasised the value of "personal contact*' in international . commerce. and said thatialthough correspondence might bring eventual restilts it was a slow process and not so effective as direct representation Th 6 direct phipping t-oufce to Japan should. .be of benefit to .New 2fealttnd exporters, es«eclallv as it was intended to a carrying service second to none by neimg modern oil-burning vesSelii constructed for speed and safe stowage'. . _•"■■■ .:■ ■ Tttfi "' MONEY . MARKET. ■ Vi - ' IT®W- YORK • BATE.. (utirfeD . ritass; ASBOCUI'WS «-•>»' Bws«ffijo wstfcftiti#*— o6ptbWH¥.) NEW YORK, Novomber Is. 'JPhe i'oli money rate of renewal stood nt 2 p?r cent. All day. BUTTER AND CHEESE. iONCON, N6temßer 14. Butter is Still. Danish 1408, «shdicoSl salted ifevir Zealand Il6« to 114s, Au»tfatlaft 166s to 108«: nnealled, Hew ZealftniJ iBOs to 1546, Atiistralidifl 126« to 128b «wt. New ■ KeSlnnn eoleuraa. 70s, whit« 735; Au#tMii»a, ooleuwd 67e to 688, white 70s pe* owt. EGCJ MARKET EASifiR. LONDON, November 13. Hjcks— -The market Is eoslMv Austtalisu, 13» 9d to 16J pet long IOT. ■,